Eagle Ford Shale Lures Halliburton To San Antonio

Natural gas extraction on the Eagle Ford Shale in South Texas has developed to the point that the oil field services company Halliburton has decided to build a $50 million operations base in San Antonio.

The Houston-based company announced yesterday that it is looking to hire 1,500 people to staff the center. Annual salaries will average $70,000, the Houston Chronicle reports.

When Halliburton reported its quarterly earnings last month, it announced record breaking profits at its North American operations: more than $1 billion. Much of that was on the back of the booming natural gas industry, which has taken off with technological advances in hydraulic fracturing, or “fracking” – a practice that allows access to natural gas stored in shale rock 5,000 feet underground.

However, Halliburton warned in its earnings call that growth in natural gas extraction may be leveling off. That may be in part due to plummeting natural gas prices brought about by record high production.

[W]ith natural gas selling in China for up to four times as much as the current U.S. spot price of about $4 per thousand cubic feet (mcf), it's no wonder that they are looking to capitalize on the new U.S. abundance by selling the gas overseas.

But for people who live on and around the Eagle Ford Shale, a 400 mile-long center for natural gas drilling that covers 24 counties, the boom continues to reverberate. Last week, we talked to the city manager in Asheron, where sales tax collections have increased almost ten-fold over the past year.

And Halliburton isn’t the only energy company to establish offices in San Antonio, according to the San Antonio Express-News. It reports that Chesapeake Energy Corp. of Oklahoma City and Houston-based EOG Resources Inc., opened offices in the city last year.

Related Content

In an indication of how aggressively energy companies are pursuing underground natural gas, Halliburton is reporting a record breaking quarter, largely based on growth in its North American operations.

For the first time ever, Halliburton’s operating income in North America exceeded $1 billion. The company said that was mainly because of strong activity in shale rock formations like the Eagle Ford in South Texas and the Bakken region in North Dakota and Montana. Halliburton also cited strong activity in the Permian Basin of West Texas.

North America has been experiencing an onshore drilling boom, as companies race to exploit hydraulic fracturing technology, commonly referred to as “fracking”. It involves pumping large amounts of liquid thousands of feet underground to fracture shale rock formations and release natural gas or oil.

Oil field service companies like Halliburton are “like the people that sold the picks and shovels during the gold rush in California,” Houston-based investment banker Allen Brooks told Bloomberg News in June.

A 4.8 magnitude earthquake struck an area of South Texas today that is a center point for natural gas and oil production in the Eagle Ford Shale. The quake’s epicenter was here in the unincorporated community of Campbellton in Atascosa County near Karnes County. You can see numerous wells in the county in this map from the Texas Railroad Commission. (Note: An earlier version of this story incorrectly placed the epicenter in Karnes County.)

A University of Texas seismologist says hydraulic fracturing itself does not cause earthquakes. But he says earthquakes have been associated with the disposal of fracking fluids.